AIM-listed MSP Outsourcery is to go into administration with the whole of its assets to be sold off to GCI Network Solutions.
In a statement to the London Stock Exchange, the firm says that “agreement has been reached to sell substantially the entire business and assets of the company’s trading subsidiary Outsourcery Hosting Limited to GCI Network Solutions Limited.
“In order to complete the sale, it will be necessary to appoint administrators, and the board of Outsourcery has resolved to appoint partners from EY as administrators for this purpose. The appointment is expected to be made today, and the sale is expected to complete shortly thereafter.”
In a series of tweets, Linney thanked his team “hard work, taking risks, innovating & creating unique biz for buyer to take forwards”.
“Not easy for large enterprises to engage with small innovators but there is value to be created if engaged properly & all parties deliver,” he later added. “It’s not a demise – biz is to be sold to a happy new owner. We had plans to keep growing but ran out of fuel and the support required.”
Outsourcery managed to have a high profile thanks to its AIM listing in 2013 and the appearance of CEO Piers Linney on BBC TV show Dragon’s Den. Despite this, the firm has consistently made heavy losses and relied on Vodafone to pump cash into the enterprise.
Shares in Outsourcery were suspended earlier this month as the company said that proposals made to the company to sell assets could “leave no or limited value” to equity shareholders.
In April, the firm announced it made a £4m loss in the 12 months to December 31 and Vodafone then agreed a “conditional drawdown working capital facility”. Vodafone then made a second loan of around £8m.
In a statement, Sam Woodward, joint administrator and restructuring partner at EY, says that over a number of years Outsourcery had invested significantly in its IT infrastructure and cost base in anticipation of strong revenue growth from its O-Cloud platform.
“In practice, the pace of revenue growth was below expectations resulting in Outsourcery suffering trading losses and cash flow pressure. The Board was unable to secure additional working capital funding and as such, commenced a marketing process to identify potential buyers for the business.”
“I am pleased to report that following that marketing process, we were able to secure a sale of the majority of the Outsourcery business to GCI Network Solutions Limited immediately following administration, which presents an excellent outcome for the business, preserves approximately 100 jobs and provides continuity of service for its customers,” he adds.
